Avantor (AVTR) Q4 2019 earnings summary

Executive summary

• 2019 net sales exceeded $6.0B, with 5.1% organic growth; biopharma demand and AMEA growth supported results.

• Priorities for 2020 included growth, margin expansion, cash generation, debt reduction, and completing the final year of VWR integration.

Financial highlights

• FY 2019 net sales were $6,040.3M, up 3.0% reported and 5.1% organically; unfavorable currency translation was $123.3M.

• Operating income was $551.8M vs. $413.5M; net income was $37.8M vs. a net loss of $86.9M.

• Q4 net sales were $1,524.0M vs. $1,473.9M; net income was $70.6M vs. a net loss of $53.3M, with diluted EPS of $0.09 vs. a loss of $0.94.

• Adjusted EPS was $0.58 vs. $0.36; adjusted EBITDA was $1,031.2M vs. $945.3M, up 9.1%.

• Operating cash flow was $354.0M and free cash flow was $302.4M, up from $200.5M and $162.8M, respectively, in 2018.

Outlook and guidance

• 2020 priorities included completing VWR integration, advancing workflow-based selling, expanding the multitiered sales model, growing margins, generating cash, and reducing debt.

• More than $180M of annualized restructuring synergies had been generated by year-end 2019; expected to benefit results in 2020 and beyond, with full synergies and savings expected by 2021.

• Biopharma was expected to remain the strongest future growth driver; AMEA was expected to continue generating significant growth.